The head of one of Australia's largest energy companies says the future of coal-fired power stations [in Australia] is limited.

Speaking on ABC1's Inside Business, AGL CEO Michael Fraser said it is unlikely any new coal generators will be built without significant improvements in technology and the ability to capture and store carbon.

Mr Fraser says he is accelerating the company's investment in wind, hydro and gas power in anticipation of a carbon-constrained future and that policy will require selling existing assets.

"There is a whole range of opportunities and we've got our balance sheet deployed in some assets that really aren't core to our strategy'" he said.

Mr Fraser says it is likely that a decision to sell its PNG gas assets, which are believed to be valued at around $500 million, is likely to made in coming weeks.

He says however no decision has been made on whether AGL will be a player in a proposed privatisation of NSW energy assets.

"I think we have to wait and see first what's for sale," he said.

"That's part of the reason why we're reshaping and giving ourselves balance sheet flexibility to participate. Ultimately whether we participate or not will depend on whether we see value for our shareholders."